In the high-visibility, high-stakes world of traditional media, no one has done it better for the last decade than Walt Disney CEO Robert Iger.
Stocks in the media industry have caught up to Disney of late, but over the past three-, five-, 10- and 15-year periods, Disney stock has significantly outperformed the media sector. Disney shares have returned more than 13 percent on an annualized basis over the past decade, almost doubling the return of the S&P 500 and distancing itself from rivals like Viacom (2 percent) and CBS (8.5 percent), according to Morningstar data. In the past week after its earnings Viacom dropped 15 percent.
Disney, which reports earnings after the close on Tuesday, recently extended Iger's contract again for another year. (Iger originally planned to step down in 2015.) In all, he's been with the company, starting at ABC, for more than four decades. The one thing that could finally get Iger out of the Disney corner office — there are rumors he may be among the business people planning a run for U.S. president as a Democrat in 2020.
Iger's messages about management are fairly consistent: Embrace technology, embrace risk and embrace positivity as a leader. "We have to exhort people, particularly our leaders, to take risks."
The 66-year-old executive has earned a reputation as a steady hand in an industry dotted with embarrassing R-rated voice mails and mercurial phone-throwers. "I'm the conscience of the company," Iger has said. "We don't have a chief ethics officer, and I consider that one of my responsibilities."
Some highlights of the Iger Way, culled from public talks and interviews he has given over the years:
With the Pixar deal presented on his second day as CEO — a company that wasn't for sale, would be an expensive acquisition and would threaten people within Disney's most-storied division — Iger clearly showed that a leader can't wait long to be bold or imprint their vision on the company. Disney decided early in Iger's tenure that it's a content company rather than a conglomerate that tries to do content and also run distribution.The strategy contrasts with rivals like Comcast and, more recently, Verizon. Once that's done, a leader has to set the organization's standards from quality and integrity — and then has to find a way to become its motivator in chief.
After deciding what a company is, the next question for the CEO is what attributes do managers need to have to carry out the vision? Iger's list begins with a hokey choice: optimism. "No one wants to follow a pessimist. ... You can be skeptical, you can be realistic, but you can't be cynical," he said, working in a reference to the dour donkey from Disney's Winnie the Pooh. "If your boss is Eeyore, do you want to work with someone like that? Oh, bother.''
This dovetails with his long-held belief that being fearless has been a key to success — though that isn't the same as taking extreme risk. "It's not that I'm a daredevil," Iger told the Los Angeles Times in 2015. "But I'm just generally not a fearful person. I don't conduct my life worrying about what could happen, what may happen."
The other boss no one wants to follow is the one who makes things up as he goes along, so the next quality a leader needs is thoughtfulness. "You have to take the time to study; you have to know the issues, the facts,'' he said during a talk at UCLA's Anderson School of Management. "No. 1, the decision will be right. Second, it will be listened to. Third, it will be respected more. You won't be shooting from the hip.''
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Thoughtfulness, Iger explained, is the root of other leadership qualities, like openness, fairness and a respect for diversity. "You need to really want to learn about new things. ... You must listen to a diversity of opinions and surround yourself with a diversity of people.'"
Iger makes a subtle distinction about hiring: It's easy to know within a few minutes whether to hire someone, he says, but it takes a few years to know whether they are truly leaders. Put executives in situations to demonstrate their people skills and their propensity to take risks and you'll find out what they're made of. "It's something you look for over time," he said.
Iger distinguishes between two types of failure: Honest mistakes that deserve second chances, and reputational killers.
"Working hard to fulfill a dream or instinct and learning over time it doesn't work, doesn't mean a career is over and a reputation killed. When a reputation is killed, it's when failure comes as a result of loss of integrity or judgement ... breaking of laws." He adds, "I'm a big believer in taking chances, particularly in a business where it is very dynamic and changing before our eyes, a lot led by digital technology."
The most consistent theme in Iger's talks is that executives have to encourage subordinates to take bigger chances. He sees a big part of his role as that of a prod: "My role as CEO and leader demands I set direction and standards and act as a catalyst ... for risk-taking and change, and great quality and experimentation."
On his own way up the ladder at Disney's ABC television network, Iger put the musical show "Cop Rock" on the air, only to see the format flop years before "Glee" cracked the code and became a hit on another network. "There is no science in creativity," Iger says, so leaders need room to make mistakes. "If you don't give yourself room to fail, you won't innovate."
One point Iger often makes is that corporations tend to be more risky in business decisions than with people decisions. "We tend to want to be in business with, or have people working for us, who we are comfortable with, and sometimes overemphasize experience over vision, intelligence. ... Experience is not always right. "
Iger's prime example: himself. "I'm the product of a couple of bosses who took real chances, who put me in jobs I had no experience in whatsoever. That taught me a great lesson."
Iger never forgets that incumbents like Disney tend to focus on protecting what they have. Iger has moved quickly to put ESPN content on the ESPN wireless app, bought Maker — a producer of YouTube videos whose integration into Disney was less than seamless — and even held talks to acquire BuzzFeed in 2014, but balked at the $1 billion price tag. Putting Disney content onto Apple's iTunes platform was an early move to convince Disney employees Iger would take the risk of cannibalizing Disney's existing distribution plans.
"The riskiest thing we can do is just maintain the status quo," he has said.
There is no greater challenge right now than the one Disney and Iger face in moving cash cow ESPN into the cordless future. ESPN has experienced some recent layoffs, including on-air talent, after seeing double-digit profit declines in each of the last two quarters. Programming costs have gone up at the same time. Iger sees similar threats everywhere: ABC, Pixar and Marvel are in many ways incumbents beating back insurgents who lead with an "everything to gain, nothing to lose" mentality.
Iger has been consistent in his view of the cure for technological threat: Get with the new approaches. In part, that is why the company is actively pushing the ESPN app and putting all live programming on it. It is also partnering with all the major marketers of the emerging skinny bundles to prop up their numbers. He has described his role as inspiring "people to act as insurgently as they can."
"Insurgents are great at taking risks," Iger says. "You have to behave more like them."
Or as he put it on last quarter's conference call with anxious Wall Street analysts, "We understand there is disruption, but we believe we have to be a disrupter, too."
— By Tim Mullaney, special to CNBC.com